The National Labor Relations Board, an independent government agency tasked with investigating unfair labor practices in the US, has found “merit” in certain charges against $16 billion “co-working” startup WeWork.
The charges were brought by former WeWork employee, Tara Zoumer, who alleges that she was fired after flagging potential labor violations and refusing to sign an arbitration agreement.
Zoumer also filed a lawsuit against WeWork in San Francisco Superior Court, which has since been ordered into arbitration in New York. WeWork will have the opportunity to settle the matter before a formal complaint is filed by the NLRB. “The goal is always to reach a settlement that is acceptable to the charging party, the charged party, and the Agency,” according to the NLRB. WeWork has until Friday to counter. A WeWork spokesperson provided this statement to Business Insider: “This charge has no merit. Our employees are our lifeblood and we firmly believe our policies are fair and lawful.”
Zoumer worked for WeWork from March to November 2015, as an associate community manager, during which time she alleged violations of California’s labor code, including a lack of overtime and meal breaks due to a misclassification. When she brought these issues up with her managers at WeWork, she was told to not talk with her coworkers about them, and then asked if she wanted to resign, Zoumer says.
After Zoumer spoke with her WeWork superiors, she claims they made all US employees sign new employment documents, which included what she and her attorney characterize as an “unlawful mandatory arbitration agreement.”
Zoumer says she was fired by WeWork after refusing to sign this agreement, which would have waived certain rights, including her right to a class-action claim.
These kinds of arbitration agreements, especially those that strip class-action rights, are controversial. The NLRB considers them to be in violation of the National Labor Relations Act, but there have been conflicting rulings from the courts. A person close to WeWork, who asked not to be identified discussing a legal matter, said that though the majority of federal courts were on WeWork’s side – in favor of these arbitration agreements – this fight could eventually go to the Supreme Court because of the differences in lower court rulings.
What does that mean for WeWork?
“Because the settlement offered by the NLRB requires thatWeWorkeliminate their class waiver and arbitration agreement, I do not anticipate they will accept the settlement terms, and I expect a complaint will issue,” Zoumer’s attorney, Ramsey Hanafi, told Business Insider.
Here is the NLRB’s response to Zoumer’s charges, which designates whether they were found to be with or without merit. These were included in an email to Zoumer, from NLRB Field Attorney Lelia M. Gomez:
The Employer violated Section 8(a)(1) of the Act by terminating the Charging Party because of her protected concerted activities, including her refusal to sign the Employer’s Employment Dispute Resolution Program and Invention, Non-Disclosure, and Non-Solicitation Agreement.-MERITThe Employer violated Section 8(a)(1) of the Act by terminating the Charging Party because of her protected concerted activities, including her activities attempting to enlist other employees in pursuing a wage class lawsuit.-NO MERIT The Employer violated Section 8(a)(1) of the Act, when on October 21, 2015, West Coast Director Chia Donati instructed employees that they could not discuss their rights, wages, and/or other terms or conditions of employment.-MERIT The Employer violated Section 8(a)(1) of the Act by maintaining an Employment Dispute Resolution Program that includes a class/collective action waiver, prohibits access to the National Labor Relations Board; and includes a confidentiality provision that precludes employees from discussing their wages, hours, and or other terms/conditions of employment.-MERIT The Employer violated Section 8(a)(1) of the Act by implementing an Employment Dispute Resolution Program in retaliation for the Charging Party’s protected concerted activities.-NO MERIT The Employer violated Section 8(a)(1) of the Act by maintaining an Invention, Non-Disclosure, and Non-Solicitation Agreement that includes a confidentiality provision that classifies personnel data as proprietary information.-MERIT.